Business Confidence Plummets Amidst Economic Challenges

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The downturn is particularly pronounced in the manufacturing and retail sectors, which showed the weakest performance in goods production and distribution. Conversely, the services sectors are holding strong, indicating disparities in economic resilience within the different sectors. NAB's findings further revealed that all sub-components of business conditions are now at or below average levels.

Geographically, South Australia and Victoria experienced the weakest conditions, while Queensland was the sole state to exhibit an improvement. "Confidence fell sharply in November and is now back below average," stated NAB Chief Economist Alan Oster. He acknowledged the persistent trend of below-average business confidence despite last month's optimistic observations.

The survey's negative sentiment is echoed in declining forward orders from the mining and retail industries, sectors that have lagged behind the long-term average throughout most of the year. However, service sectors such as recreation, finance, and property services continue to perform well above their counterparts.

On a positive note, capacity utilisation remains robust at 82.4%, surpassing the long-term average. Capital expenditure has also increased by 10 points, indicating sustained investment activity. Additionally, consumer prices show potential disinflationary trends, with retail prices taking a 0.6% dip and recreation and personal services seeing a 0.7% decline. Overall, output price growth held stable at a quarterly 0.6%.

Mr. Oster highlighted the mixed economic signals: "Overall, the survey points to ongoing soft growth in Q4 though with capacity utilisation unchanged at an above-average level. It will likely take more time for price pressures to fully normalise."

These developments emerge in the context of NAB's Australian housing market analysis, which, alongside data from CoreLogic, alludes to a correction phase for the real estate market as December progresses.

The report indicated that house values in four out of eight capitals decreased, led by Melbourne. Despite 22 consecutive months of growth previously, November's overall house price increase stirred faintly at just 0.1%. Notably, Perth stood out with a 1.1% increase, reflecting annual growth of 3% for the quarter, albeit much lower than earlier figures.

Highlights revealed muted growth in Perth, Brisbane, and Adelaide, contrasting with declines in Melbourne, Darwin, and Sydney where high-end properties faced more significant depreciations. A persistent increment in regional housing, recording a 1.1% rise over three months, shows diversification in house price trends nationally.

Factors such as rising inventory levels, particularly visible in Sydney and Melbourne, underscore shifting dynamics; listings across major cities have surged 16% this quarter. This is met with a decline in home sales, particularly felt in Sydney.

With rental prices continuing their climb-albeit at a slower pace-Tim Lawless of CoreLogic states, "Housing markets are likely to be arriving in 2025 on relatively weaker footing, with value growth losing steam...advertised stock levels rising, unaffordability at record highs, and demand no longer keeping pace with the flow of new listings." Until interest rates fall, pressure on housing trends appears unlikely to ease significantly.

Published:Tuesday, 10th Dec 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

Money3 Penalised $1.55 Million for Lending Violations

25 May 2026: Paige Estritori

The Federal Court has imposed a $1.55 million penalty on Money3 Loans Pty Ltd for failing to adhere to responsible lending obligations in providing car finance to vulnerable consumers. This ruling underscores the critical importance of compliance with lending regulations to protect consumers from potential financial harm. - read more

Cigno Australia and BSF Solutions Penalised $7 Million for Credit Act Breaches

25 May 2026: Paige Estritori

The Federal Court has ordered Cigno Australia and BSF Solutions, along with their respective directors, to pay a combined penalty of $7 million for engaging in unlicensed credit activities and imposing prohibited fees. This ruling highlights the necessity for lenders to operate within the bounds of Australian credit regulations to protect consumers from exploitative practices. - read more

Firstmac Enhances Broker Offerings with New Secured Caravan Loans

25 May 2026: Paige Estritori

Firstmac, a leading non-bank lender in Australia, has expanded its broker offerings by introducing secured caravan loans. This new product aims to equip brokers with a competitive solution to meet the increasing demand for lifestyle finance among consumers. - read more

Understanding the 2026 Federal Budget: What It Means for You

17 May 2026: Paige Estritori

The Australian government has unveiled the 2026 Federal Budget, introducing a series of measures aimed at bolstering economic resilience and providing relief to citizens amidst global challenges. Here's a breakdown of the key initiatives and their implications for Australians. - read more

RBA's May 2026 Rate Hike: What Borrowers Need to Know

17 May 2026: Paige Estritori

In its May 2026 meeting, the Reserve Bank of Australia (RBA) announced a 25 basis point increase in the official cash rate, bringing it to 4.35%. This marks the third consecutive rate hike this year, as the central bank intensifies efforts to curb persistent inflationary pressures within the Australian economy. - read more

Australians Cite Housing Costs as Leading Financial Stress in 2026

17 May 2026: Paige Estritori

As 2026 unfolds, housing costs have emerged as the foremost financial concern for Australians. According to Canstar's latest Consumer Pulse Report, 22% of respondents identified mortgage and rent expenses as their primary financial stressor, more than doubling the figure from five years ago. - read more

Government Fast-Tracks $6.15 Billion to Support Australian Businesses

09 May 2026: Paige Estritori

The Australian government has announced an expedited release of $6.15 billion in concessional capital to support businesses facing global market disruptions. This initiative aims to bolster domestic industries, enhance production capabilities, and assist in decarbonisation efforts. - read more

NAB Achieves 11% Net Profit Growth in First Quarter of 2026

09 May 2026: Paige Estritori

National Australia Bank (NAB) has reported an 11% year-on-year increase in net profit for the first quarter of the 2026 financial year, reaching $1.56 billion. This growth is attributed to higher revenue across customer-facing divisions and a supportive Australian economic environment. - read more

ANZ Bank Achieves $1.38 Billion Profit in First Quarter of 2026

01 May 2026: Paige Estritori

ANZ Bank has reported a cash profit of $1.38 billion for the first quarter of 2026, marking a 75% increase compared to the average quarterly profit in the second half of 2025. This significant growth is attributed to a 5% year-on-year rise in deposits, reaching $561.59 billion, and a 0.3% increase in net loans and cash advances, totaling $587.27 billion. - read more

Click for more Finance News